India and EAEU Set to Launch Trade Agreement Talks: What’s at Stake?

Formal Negotiations Begin

New Delhi: Commerce and Industry Minister Piyush Goyal announced that India will commence formal discussions with the Eurasian Economic Union (EAEU) regarding a trade agreement starting Wednesday.

The terms of reference for this agreement were established on August 20, marking a significant step forward.

Goyal confirmed to reporters, "The FTA discussions will begin tomorrow here."

The signed Terms of Reference detail an 18-month plan aimed at expanding market opportunities for Indian enterprises, including MSMEs, farmers, and fishermen.

The EAEU comprises five nations: Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

This initiative is crucial for India as it seeks to broaden its export markets in light of the high tariffs imposed by the United States.

Among the EAEU members, Russia stands out as India's primary trading partner, with bilateral trade reaching USD 68.72 billion in the fiscal year 2024-25, where exports accounted for USD 4.88 billion and imports for USD 63.84 billion, largely driven by increased crude oil imports.

In the previous fiscal year, trade figures with Armenia, Belarus, Kazakhstan, and Kyrgyzstan were USD 315.18 million, USD 106.69 million, USD 349.48 million, and USD 56.78 million, respectively.

Goyal also highlighted the potential for initiating discussions on a trade agreement with the Southern African Customs Union (SACU), which includes South Africa, Namibia, Botswana, Lesotho, and Eswatini, making it the oldest customs union in the world.

Additionally, talks are ongoing for the second phase of a preferential trade agreement with the Mercosur bloc, which consists of Brazil, Argentina, Uruguay, and Paraguay.

He mentioned that negotiations with Israel will soon begin, focusing on an early harvest trade agreement, with interests in agriculture technology, innovation, mobility, and services.

Regarding the Free Trade Agreement (FTA) discussions with Canada, Goyal noted mutual interest from both parties, with meetings planned to initiate the process.

A free trade agreement typically involves two nations reducing or eliminating import duties on a wide range of goods exchanged between them.